Fig. 1 – Robert Clive
accepting the Diwani
of Bengal, Bihar and
Orissa from the Mughal
ruler in 1765
The Company Becomes the Diwan
On 12 August 1765, the Mughal emperor appointed the East
India Company as the Diwan of Bengal. The actual event most
probably took place in Robert Clive’s tent, with a few Englishmen
and Indians as witnesses. But in the painting above, the event
is shown as a majestic occasion, taking place in a grand setting.
The painter was commissioned by Clive to record the memorable
events in Clive’s life. The grant of Diwani clearly was one such
event in British imagination.
As Diwan, the Company became the chief financial
administrator of the territory under its control. Now it had to think
of administering the land and organising its revenue resources.
This had to be done in a way that could yield enough revenue to
meet the growing expenses of the company. A trading company
had also to ensure that it could buy the products it needed and
sell what it wanted.
Ruling the Countryside
3
chap 1-4.indd 26 4/22/2022 2:49:47 PM
Rationalised 2023-24
RULING THE COUNTRYSIDE 27
Over the years, the Company also learnt that it had to
move with some caution. Being an alien power, it needed
to pacify those who in the past had ruled the countryside,
and enjoyed authority and prestige. Those who had held
local power had to be controlled but they could not be
entirely eliminated.
How was this to be done? In this chapter we will see how the
Company came to colonise the countryside, organise revenue
resources, redefine the rights of people, and produce the crops
it wanted.
Revenue for the Company
The Company had become the Diwan, but it still saw itself
primarily as a trader. It wanted a large revenue income but
was unwilling to set up any regular system of assessment and
collection. The effort was to increase the revenue as much as it
could and buy fine cotton and silk cloth as cheaply as possible.
Within five years, the value of goods bought by the Company
in Bengal doubled. Before 1765, the Company had purchased
goods in India by importing gold and silver from Britain. Now
the revenue collected in Bengal could finance the purchase of
goods for export.
Soon it was clear that the Bengal economy was facing a deep
crisis. Artisans were deserting villages since they were being
forced to sell their goods to the Company at low prices. Peasants
were unable to pay the dues that were being demanded from them.
Artisanal production was in decline, and agricultural cultivation
showed signs of collapse. Then in 1770, a terrible famine killed
ten million people in Bengal. About one-third of the population
was wiped out.
Fig. 2 – A weekly market
in Murshidabad in Bengal
Peasants and artisans
from rural areas regularly
came to these weekly
markets (haats) to sell
their goods and buy what
they needed. These markets
were badly affected during
times of economic crisis.
chap 1-4.indd 27 4/22/2022 2:49:47 PM
Rationalised 2023-24
28 OUR PASTS – III
The need to improve agriculture
If the economy was in ruins, could the Company be certain
of its revenue income? Most Company officials began to
feel that investment in land had to be encouraged and
agriculture had to be improved.
How was this to be done? After two decades of debate
on the question, the Company finally introduced the
Permanent Settlement in 1793. By the terms of the
settlement, the rajas and taluqdars were recognised
as zamindars. They were asked to collect rent from the
peasants and pay revenue to the Company. The amount
to be paid was fixed permanently, that is, it was not to be
increased ever in future. It was felt that this would ensure
a regular flow of revenue into the Company’s coffers and
at the same time encourage the zamindars to invest in
improving the land. Since the revenue demand of the state
would not be increased, the zamindar would benefit from
increased production from the land.
The problem
The Permanent Settlement, however, created problems.
Company officials soon discovered that the zamindars
were in fact not investing in the improvement of land.
The revenue that had been fixed was so high that the
zamindars found it difficult to pay. Anyone who failed
to pay the revenue lost his zamindari. Numerous
zamindaris were sold off at auctions organised by
the Company.
By the first decade of the nineteenth century, the
situation changed. The prices in the market rose and
cultivation slowly expanded. This meant an increase in
the income of the zamindars but no gain for the Company
since it could not increase a revenue demand that had
been fixed permanently.
Even then the zamindars did not have an interest
in improving the land. Some had lost their lands in
the earlier years of the settlement; others now saw the
possibility of earning without the trouble and risk of
investment. As long as the zamindars could give out the
land to tenants and get rent, they were not interested in
improving the land.
Fig. 3 – Charles Cornwallis
Cornwallis was the Governor-
General of Bengal when the
Permanent Settlement was
introduced.
Colebrook on
Bengal ryots
In many villages of
Bengal, some of the
powerful ryots did not
cultivate, but instead gave
out their lands to others (the
under-tenants), taking
from them very high
rents. In 1806, H. T.
Colebrook described
the conditions of these
under-tenants in Bengal:
The under-tenants,
depressed by an
excessive rent in
kind, and by usurious
returns for the cattle,
seed, and subsistence,
advanced to them,
can never extricate
themselves from
debt. In so abject a
state, they cannot
labour in spirit, while
they earn a scanty
subsistence without
hope of bettering
their situation.
Activity
Why do you think Colebrook is concerned with the
conditions of the under-ryots in Bengal? Read the
preceding pages and suggest possible reasons.
Source 1
chap 1-4.indd 28 6/14/2022 2:39:26 PM
Rationalised 2023-24
RULING THE COUNTRYSIDE 29
On the other hand, in the villages, the cultivator
found the system extremely oppressive. The rent he paid
to the zamindar was high and his right on the land was
insecure. To pay the rent he had to often take a loan
from the moneylender, and when he failed to pay the
rent, he was evicted from the land he had cultivated
for generations.
A new system is devised
By the early nineteenth century, many of the Company
officials were convinced that the system of revenue
had to be changed again. How could revenues be fixed
permanently at a time when the Company needed
more money to meet its expenses of administration
and trade?
In the North Western Provinces of the Bengal
Presidency (most of this area is now in Uttar Pradesh),
an Englishman called Holt Mackenzie devised the
new system which came into effect in 1822. He felt
that the village was an important social institution
in north Indian society and needed to be preserved.
Under his directions, collectors went from village to
village, inspecting the land, measuring the fields,
and recording the customs and rights of different
groups. The estimated revenue of each plot within a
village was added up to calculate the revenue that
each village (mahal) had to pay. This demand was
to be revised periodically, not permanently fixed. The
charge of collecting the revenue and paying it to the
Company was given to the village headman, rather
than the zamindar. This system came to be known as
the mahalwari settlement.
The Munro system
In the British territories in the South, there was a similar
move away from the idea of Permanent Settlement. The
new system that was devised came to be known as the
ryotwar (or ryotwari ). It was tried on a small scale by
Captain Alexander Read in some of the areas that were
taken over by the Company after the wars with Tipu Sultan.
Subsequently developed by Thomas Munro, this system
was gradually extended all over south India.
Read and Munro felt that in the south there were
no traditional zamindars. The settlement, they argued,
had to be made directly with the cultivators (ryots) who
had tilled the land for generations. Their fields had to
be carefully and separately surveyed before the revenue
assessment was made. Munro thought that the British
Mahal – In British
revenue records, mahal
is a revenue estate which
may be a village or a
group of villages.
Fig. 4 – Thomas Munro, Governor
of Madras (1819 –26)
chap 1-4.indd 29 4/22/2022 2:49:49 PM
Rationalised 2023-24
30 OUR PASTS – III
should act as paternal father figures protecting the
ryots under their charge.
All was not well
Within a few years after the new systems were imposed,
it was clear that all was not well with them. Driven by
the desire to increase the income from land, revenue
officials fixed too high a revenue demand. Peasants were
unable to pay, ryots fled the countryside, and villages
became deserted in many regions. Optimistic officials
had imagined that the new systems would transform
the peasants into rich enterprising farmers. But this
did not happen.
Crops for Europe
The British also realised that the countryside could
not only yield revenue, it could also grow the crops
that Europe required. By the late eighteenth century,
the Company was trying its best to expand the
cultivation of opium and indigo. In the century and
a half that followed, the British persuaded or forced
cultivators in various parts of India to produce other
crops: jute in Bengal, tea in Assam, sugarcane in
the United Provinces (now Uttar Pradesh), wheat
in Punjab, cotton in Maharashtra and Punjab, rice
in Madras.
How was this done? The British used a variety of methods
to expand the cultivation of crops that they needed. Let us
take a closer look at the story of one such crop, one such
method of production.
Does colour have a
history?
Figs. 5 and 6 are two
images of cotton prints.
The image on the left
(Fig. 5) shows a kalamkari
print created by weavers
of Andhra Pradesh in
India. On the right is
a floral cotton print
designed and produced
by William Morris, a
famous poet and artist
of nineteenth-century
Britain. There is one
thing common in the
Fig. 5 – A kalamkari print,
twentieth-century India
Fig. 6 – A Morris cotton print, late-
nineteenth-century England
Activity
Imagine that you are a
Company representative
sending a report back
to England about the
conditions in rural areas
under Company rule.
What would you write?
chap 1-4.indd 30 4/22/2022 2:49:53 PM
Rationalised 2023-24
RULING THE COUNTRYSIDE 31
two prints: both use a rich blue colour – commonly called
indigo. Do you know how this colour was produced?
The blue that you see in these prints was produced
from a plant called indigo. It is likely that the blue dye
used in the Morris prints in nineteenth-century Britain
was manufactured from indigo plants cultivated in India.
For India was the biggest supplier of indigo in the world at
that time.
Why the demand for Indian indigo?
The indigo plant grows primarily in the tropics. By the
thirteenth century, Indian indigo was being used by cloth
manufacturers in Italy, France and Britain to dye cloth.
However, only small amounts of Indian indigo reached
the European market and its price was very high.
European cloth manufacturers therefore had to depend
on another plant called woad to make violet and blue
dyes. Being a plant of the temperate zones, woad was
more easily available in Europe. It was grown in northern
Italy, southern France and in parts of Germany and
Britain. Worried by the competition from indigo, woad
producers in Europe pressurised their governments to
ban the import of indigo.
Cloth dyers, however, preferred indigo as a dye. Indigo
produced a rich blue colour, whereas the dye from woad
was pale and dull. By the seventeenth century, European
cloth producers persuaded their governments to relax the
ban on indigo import. The French began cultivating indigo
in St Domingue in the Caribbean islands, the Portuguese
in Brazil, the English in Jamaica, and the Spanish in
Venezuela. Indigo plantations also came up in many parts
of North America.
By the end of the eighteenth century, the demand for
Indian indigo grew further. Britain began to industrialise,
and its cotton production expanded dramatically, creating
an enormous new demand for cloth dyes. While the demand
for indigo increased, its existing supplies from the West
Indies and America collapsed for a variety of reasons.
Between 1783 and 1789, the production of indigo in the
world fell by half. Cloth dyers in Britain now desperately
looked for new sources of indigo supply.
From where could this indigo be procured?
Britain turns to India
Faced with the rising demand for indigo in Europe, the
Company in India looked for ways to expand the area under
indigo cultivation.
Plantation – A large
farm operated by a
planter employing
various forms of
forced labour.
Plantations are
associated with the
production of coffee,
sugarcane, tobacco,
tea and cotton.
chap 1-4.indd 31 4/22/2022 2:49:53 PM
Rationalised 2023-24
32 OUR PASTS – III
From the last decades
of the eighteenth century,
indigo cultivation in
Bengal expanded rapidly
and Bengal indigo came to
dominate the world market.
In 1788, only about 30 per
cent of the indigo imported
into Britain was from India.
By 1810, the proportion had
gone up to 95 per cent.
As the indigo trade
grew, commercial agents
and officials of the
Company began investing
in indigo production. Over
the years many Company
officials left their jobs
to look after their indigo
business. Attracted by
the prospect of high profits, numerous Scotsmen and
Englishmen came to India and became planters. Those
who had no money to produce indigo could get loans
from the Company and the banks that were coming up
at the time.
How was indigo cultivated?
There were two main systems of indigo cultivation – nij
and ryoti. Within the system of nij cultivation, the planter
produced indigo in lands that he directly controlled.
He either bought the land or rented it from other
zamindars and produced indigo by directly employing
hired labourers.
The problem with nij cultivation
The planters found it difficult to expand the area under
nij cultivation. Indigo could be cultivated only on fertile
lands, and these were all already densely populated. Only
small plots scattered over the landscape could be acquired.
Planters needed large areas in compact blocks to cultivate
indigo in plantations. Where could they get such land
from? They attempted to lease in the land around the
indigo factory, and evict the peasants from the area. But
this always led to conflicts and tension.
Nor was labour easy to mobilise. A large plantation
required a vast number of hands to operate. And labour
was needed precisely at a time when peasants were usually
busy with their rice cultivation.
Fig. 7 – The Slave Revolt in
St Domingue, August 1791,
painting by January Scuhodolski
In the eighteenth century, French
planters produced indigo and
sugar in the French colony of
St Domingue in the Caribbean
islands. The African slaves who
worked on the plantations rose
in rebellion in 1791, burning
the plantations and killing their
rich planters. In 1792, France
abolished slavery in the French
colonies. These events led to the
collapse of the indigo plantations
on the Caribbean islands.
Slave – A person who is
owned by someone else –
the slave owner. A slave
has no freedom and is
compelled to work for the
master.
chap 1-4.indd 32 4/22/2022 2:49:55 PM
Rationalised 2023-24
RULING THE COUNTRYSIDE 33
Nij cultivation on a large scale also required many
ploughs and bullocks. One bigha of indigo cultivation
required two ploughs. This meant that a planter with
1,000 bighas would need 2,000 ploughs. Investing
on purchase and maintenance of ploughs was a big
problem. Nor could supplies be easily got from the
peasants since their ploughs and bullocks were busy
on their rice fields, again exactly at the time that the
indigo planters needed them.
Till the late nineteenth century, planters were therefore
reluctant to expand the area under nij cultivation. Less
than 25 per cent of the land producing indigo was under
this system. The rest was under an alternative mode of
cultivation – the ryoti system.
Indigo on the land of ryots
Under the ryoti system, the planters
forced the ryots to sign a contract,
an agreement (satta). At times
they pressurised the village
headmen to sign the contract on
behalf of the ryots. Those who
signed the contract got cash
advances from the planters at
low rates of interest to produce
indigo. But the loan committed
the ryot to cultivating indigo on at
least 25 per cent of the area under
his holding. The planter provided
the seed and the drill, while the
cultivators prepared the soil, sowed
the seed and looked after the crop.
Fig. 8 – Workers harvesting
indigo in early-nineteenth-century
Bengal. From Colesworthy Grant,
Rural Life in Bengal, 1860
In India the indigo plant was cut
mostly by men.
Bigha – A unit of
measurement of land.
Before British rule, the
size of this area varied.
In Bengal the British
standardised it to about
one-third of an acre.
Fig. 9 – The Indigo plant being
brought from the fields to the
factory
chap 1-4.indd 33 4/22/2022 2:49:56 PM
Rationalised 2023-24
34 OUR PASTS – III
Fig. 13 – The indigo
is ready for sale
Here you can see the last stage of the production –
workers stamping and cutting the indigo pulp that
has been pressed and moulded. In the background you
can see a worker carrying away the blocks for drying.
Fig. 12 – The Vat-Beater
The indigo worker
here is standing
with the paddle that
was used to stir the
solution in the vat.
These workers had
to remain in waist-
deep water for over
eight hours to beat the
indigo solution.
Fig. 11 – Women usually
carried the indigo plant to
the vats.
Vat – A fermenting
or storage vessel
Fig. 10 – An indigo factory located near indigo fields, painting by
William Simpson, 1863
The indigo villages were usually around indigo factories owned by
planters. After harvest, the indigo plant was taken to the vats in
the indigo factory. Three or four vats were needed to manufacture
the dye. Each vat had a separate function. The leaves stripped off
the indigo plant were first soaked in warm water in a vat (known
as the fermenting or steeper vat) for several hours. When the
plants fermented, the liquid began to boil and bubble. Now the
rotten leaves were taken out and the liquid drained into another
vat that was placed just below the first vat.
In the second vat (known as the beater vat), the solution was
continuously stirred and beaten with paddles. When the liquid
gradually turned green and then blue, lime water was added to
the vat. Gradually the indigo separated out in flakes, a muddy
sediment settled at the bottom of the vat and a clear liquid rose
to the surface. The liquid was drained off and the sediment –
the indigo pulp – transferred to
another vat (known as the
settling vat), and then
pressed and dried for
sale.
Fermenting
Vat
Beater
Vat
How was indigo produced?
chap 1-4.indd 34 4/22/2022 2:49:59 PM
Rationalised 2023-24
RULING THE COUNTRYSIDE 35
When the crop was delivered to the planter after the
harvest, a new loan was given to the ryot, and the cycle
started all over again. Peasants who were initially tempted
by the loans soon realised how harsh the system was. The
price they got for the indigo they produced was very low
and the cycle of loans never ended.
There were other problems too. The planters usually
insisted that indigo be cultivated on the best soils in
which peasants preferred to cultivate rice. Indigo,
moreover, had deep roots and it exhausted the soil
rapidly. After an indigo harvest the land could not be
sown with rice.
The “Blue Rebellion” and After
In March 1859, thousands of ryots in Bengal refused
to grow indigo. As the rebellion spread, ryots refused
to pay rents to the planters, and attacked indigo
factories armed with swords and spears, bows and
arrows. Women turned up to fight with pots, pans
and kitchen implements. Those who worked for the
planters were socially boycotted, and the gomasthas –
agents of planters – who came to collect rent were
beaten up. Ryots swore they would no longer take
advances to sow indigo nor be bullied by the planters’
lathiyals – the lathi-wielding strongmen maintained by
the planters.
Why did the indigo peasants decide that they would no
longer remain silent? What gave them the power to rebel?
Clearly, the indigo system was intensely oppressive. But
those who are oppressed do not always rise up in rebellion.
They do so only at times.
In 1859, the indigo ryots felt that they had the support
of the local zamindars and village headmen in their
rebellion against the planters. In many villages, headmen
who had been forced to sign indigo contracts, mobilised
the indigo peasants and fought pitched battles with the
lathiyals. In other places even the zamindars went around
villages urging the ryots to resist the planters. These
zamindars were unhappy with the increasing power of the
planters and angry at being forced by the planters to give
them land on long leases.
The indigo peasants also imagined that the British
government would support them in their struggle
against the planters. After the Revolt of 1857, the
British government was particularly worried about the
possibility of another popular rebellion. When the news
spread of a simmering revolt in the indigo districts,
A song from an
indigo-producing
village
In the moments of
struggle, people often
sing songs to inspire each
other and to build a sense
of collective unity. Such
songs give us a glimpse
of their feelings. During
the indigo rebellion,
many such songs could
be heard in the villages
of lower Bengal. Here is
one such song:
The long lathis
wielded by the
planter of Mollahati /
now lie in a cluster
The babus of Kolkata
have sailed down /to
see the great fight
This time the raiyats
are all ready, / they
will no longer be
beaten in silence
They will no longer
give up their life /
without fighting the
lathiyals.
Source 2
chap 1-4.indd 35 4/22/2022 2:49:59 PM
Rationalised 2023-24
36 OUR PASTS – III
the Lieutenant Governor toured the region in the winter
of 1859. The ryots saw the tour as a sign of government
sympathy for their plight. When in Barasat, the magistrate
Ashley Eden issued a notice stating that ryots would not
be compelled to accept indigo contracts, word went around
that Queen Victoria had declared that indigo need not be
sown. Eden was trying to placate the peasants and control
an explosive situation, but his action was read as support
for the rebellion.
As the rebellion spread, intellectuals from Calcutta
rushed to the indigo districts. They wrote of the misery of
the ryots, the tyranny of the planters, and the horrors of
the indigo system.
Worried by the rebellion, the government brought in
the military to protect the planters from assault, and set
up the Indigo Commission to enquire into the system of
indigo production. The Commission held the planters
guilty, and criticised them for the coercive methods
they used with indigo cultivators. It declared that indigo
production was not profitable for ryots. The Commission
asked the ryots to fulfil their existing contracts but also told
them that they could refuse to produce indigo in future.
“I would rather beg than sow indigo”
Hadji Mulla, an indigo cultivator of Chandpore, Thana
Hardi, was interviewed by the members of the Indigo
Commission on Tuesday, 5 June 1860. This is what he
said in answer to some of the questions:
W. S. Seton Karr, President of the Indigo
Commission: Are you now willing to sow indigo;
and if not on what fresh terms would you be
willing to do it?
Hadji Mulla: I am not willing to sow, and I
don’t know that any fresh terms would satisfy me.
Mr Sale: Would you not be willing to sow at a
rupee a bundle?
Hadji Mulla: No I would not; rather than sow
indigo I will go to another country; I would rather
beg than sow indigo.
Indigo Commission Report, Vol. II, Minutes of Evidence, p. 67
Source 3
Activity
Imagine you are a
witness giving evidence
before the Indigo
Commission. W.S. Seton
Karr asks you “On what
condition will ryots grow
indigo?” What will your
answer be?
chap 1-4.indd 36 4/22/2022 2:50:00 PM
Rationalised 2023-24
RULING THE COUNTRYSIDE 37
Let’s recall
1. Match the following:
ryot village
mahal peasant
nij cultivation on ryot’s lands
ryoti cultivation on planter’s own land
2. Fill in the blanks:
(a) Growers of woad in Europe saw __________
as a crop which would provide competition
to their earnings.
(b) The demand for indigo increased in late
eighteenth-century Britain because of
__________.
(c) The international demand for indigo was
affected by the discovery of __________.
(d) The Champaran movement was against
__________.
Let’s discuss
3. Describe the main features of the Permanent
Settlement.
4. How was the mahalwari system different from the
Permanent Settlement?
After the revolt, indigo production collapsed in Bengal.
But the planters now shifted their operation to Bihar.
With the discovery of synthetic dyes in the late nineteenth
century, their business was severely affected, but yet
they managed to expand production. When Mahatma
Gandhi returned from South Africa, a peasant from Bihar
persuaded him to visit Champaran and see the plight of
the indigo cultivators there. Mahatma Gandhi’s visit in
1917 marked the beginning of the Champaran movement
against the indigo planters.
chap 1-4.indd 37 4/22/2022 2:50:01 PM
Rationalised 2023-24
38 OUR PASTS – III
Let’s imagine
Imagine a conversation
between a planter and
a peasant who is being
forced to grow indigo.
What reasons would
the planter give to
persuade the peasant?
What problems would
the peasant point
out? Enact their
conversation.
5. Give two problems which arose with the new Munro
system of fixing revenue.
6. Why were ryots reluctant to grow indigo?
7. What were the circumstances which led to the
eventual collapse of indigo production in Bengal?
Let’s do
8. Find out more about the Champaran movement and
Mahatma Gandhi’s role in it.
9. Look into the history of either tea or coffee
plantations in India. See how the life of workers in
these plantations was similar to or different from
that of workers in indigo plantations.
chap 1-4.indd 38 4/22/2022 2:50:03 PM
Rationalised 2023-24
